How to grow your assets on stock exchanges

How and where to start

CAPITAL PARTNERS, a.s. – as a licensed securities broker-dealer and holder of forex license, is able to offer you brokerage services on various stock exchanges not only in USA, but also in Europe and Central Europe. Potential client must close with us Consignment Agreement, which gives us the mandate to arrange transactions in our name for the accounts of our clients. After mutual agreement, client can enter into Portfolio Management Agreement with us.

CAPITAL PARTNERS, a.s. – offers to our clients Portfolio Management Services, which means we do a complete asset management, of cash and securities, on the behalf of our clients. In this case, the client’s role in trading is more passive and decision making with regard to selection of investments is solely upon us, as investment advisor. However, client does have the option to trade (buy and sell securities) on various exchanges on his/her own, using a broker.

STOCK EXCHANGES IN USA

The stock market in USA is comprised by various exchanges, mainly NYSE, NASDAQ and AMEX.

NYSE - New York Stock Exchange, based in New York on Wall Street, was found in 1792 and it is the biggest and oldest stock exchange in The United States of America. Here change hands shares of companies from “old economy” like Boeing, or Ford to “new economy” like IBM or Genetech. One of the most important indices is Standard & Poor 500 (S&P500).

FINANCE

Stock exchanges in USA are accessible to the general public, not only to the rich, but also to the less wealthy. The amount of money we would like to invest in shares of company of your choice or selected by us, is almost not limited. You can trade with millions of dollars, or with just a few. You can also trade by using a margin. The margin account is open automatically with Consignment Agreement and allows you to trade with the some of 2 times your deposit. What it means is that is you deposit into your margin account for example $5,000 you would be able to buy shares up to $10,000. Keep in mind that with this type of trading your risk is double.

Real trading. There is a range of speculations. The first is to decide if you want to invest long term, half a year and more and profit from dividend yields as well as long term appreciation of share prices, or you want to focus on short term speculations entered for example within one week, where we speculate only with price differentials of shares. Another speculation can be divided as “long” and “short”. Long is a classy speculation, where at first we buy at the market and after the price goes up we sell with a profit. Short uses the opposite share price move, here we sell at first without owning the shares awe wait for correction. If correction happens and price does go down to price level we desire, we buy the shares with the profit back (when we buy back, we call it “cover”). To profit faster on the above mentioned speculations we can use the already mentioned 50% margin, which could double our profit or saves us time by half to reach a given profit.

WHY TO INVEST NOW?

It appears very interesting to invest into foreign stocks denominated in USD. The forex –foreign exchange, rate or rate of currency foreign exchange between USD and Czech crown looks currently very attractive. The reason why to invest into shares is that not only the interest rate on cash deposits offered my major banks is still very low and the rate barely accounts for inflation, but also profit grow of corporations globally is very strong and the trend should continue. The global economical expansion should continue to lift share prices in majority of industries.

TYPES OF PORTFOLIOS

As a licensed securities broker and investment advisor we offer to our clients three basic types of portfolios:

• Active portfolio
• Aggressive portfolio
• Conservative portfolio

Clients could use our expertise to decide which type of portfolio to choose. The most common choice is the Active portfolio, through which we as investment advisor manages your funds. Here it is a mix of less and more volatile shares, long positions or short. We prefer to invest in quality shares from old or new economy, which report year by year profits and declare dividends payable to the owners.

The Aggressive type of portfolio is recommended only to clients, which are aware of substantial risks, which are balanced by potential of extraordinary profits. The Conservative portfolio is recommended to clients whose funds are available to them for long period of time, two years or more. For those portfolios we buy quite stable shares with large market capitalization and high dividend yield.

FUNDS

This is very popular financial instrument for clients, which can invest their funds directly to a selected fund, instead of selecting a portfolio of stocks on their own. Funds invest to variety of diversified financial instruments in order to prevent large price swings. Among funds are for example: sector funds (investing in certain industrial sector), money market funds (invest in certain CD’s in different currencies), fixed income funds (which invest in government and corporate bonds), funds of funds etc. From this point of view, funds seem to be less risky, but must also count with lower return. We offer hundreds of various international funds, not only European (based in EUR) but also funds which trade in USA (US$). Among examples are funds managed by Oppenheimer, Bear Stearns, Pioneer, JP Morgan, and Julius Baer etc.